“The housing crisis can’t be solved without urban land reform”

Cranes over London. Image: Getty.

While much has been said about the need to suspend or mitigate against the right to buy and its context in London, there is now growing attention on the dysfunctional role the current land trading system plays in London’s housing crisis.  

Southwark council has begun in earnest in the past few months the process of identifying and bidding for new development sites. Yet the extortionate asking prices offered on the open market mean any successful bids would make a significant hit on the viability of future schemes and impose a further burden on an already constrained budget for housing investment. 

As present, the valuation of land for viability testing purposes in the planning process is set against the existing use of the site. Independently of this, a free market for land races away, with the speculative premium off the back of changes in public policy and public investment in an area – the so-called hope value – fully priced in on potential development sites across our borough.

If councils could spend their money on building new homes rather than on deadweight land transactions, we could go much further in delivering the kinds of homes that residents actually need. For this reason Southwark, like other serious house-building councils, are calling on government to revise the 1961 Land Compensation Code to ensure that new land holdings can be secured on terms that reflect  the affordable nature of what we mean to build – affordable land for affordable housing.

To better document the scale of the problem, we have been developing a log of both real land transactions and existing use values (as used for viability testing) on sites allocated for housing development in our local plan, as part of an evidence base to help government assess the scale of the problem. Three recent hope value horror stories from Southwark illustrate the scale of the challenge:

1. A site in the centre of our borough, adjacent to land we own, became available to buy through a blind auction, and would have allowed us a more coherent development plot, meaning we could increase the number of council homes on this site from 80 to roughly 200. The existing use value was set at £1.5m, and after much internal discussion our surveyors put in a bid of £5.5m – a premium of around 14 council homes, which would have added around £50k cost per home.

The site eventually sold for £8.5m, meaning the council couldn’t develop itself. The winning bidder will likely be tempted to overdevelop the site with inappropriate height and massing (based on the experience of resident feedback on planning applications across the road), dilute affordable housing and infrastructure contributions, or simply leave it empty and undeveloped for many years until market conditions improve. 

2. A large site on the east of the borough near the proposed site of a new Bakerloo lines station had an estimated existing use value of around £5m. When the land owners put the site up for auction they offered a guide price of £25m, and then withdrew it on the basis they could achieve a higher price later on with more advantageous policy environment. 

3. Sites with recently consented permissions on Old Kent Rd, the focal point of a major regeneration in our borough, include 313-349 Ilderton Rd, whose viability assessment reported an existing use value of £1,853,250 . This site is now for sale at £15m. Similarly, the developer of 134-140 Ilderton Rd recently reported an existing use value of £2,539,500, and now seeks to sell for £10m. 

In each of these cases, density, land value and viability in a high demand area tug at one other, and the free open market for land reinforces a circularity – on which turns planning permissions and site allocations into any other kind of tradeable commodity, dissociated from the council’s imperative of meeting local housing needs, securing sums for social infrastructure and ensuring good growth.  

The demand for a different land compensation regime is not historically unusual: the 1941 Uthwatt report describes methods of community land value capture and the 1947 system of nationalised land use and developer betterment part-survives to this day. But the concept of compensation reform has only moved back in to the mainstream in recent months. 


The prominence given by the communities select committee’s study of land value capture, Conservative council leaders calling for radical caps on land speculator profits, and researchers and commentators like Daniel BentleyRose Grayston and Thomas Aubrey from different parts of the political spectrum, have all highlighted the perversities of the current land trading system. Oliver Letwin’s influential review of build out rates also goes part of the way to identifying the problem proposing caps on land compensation sums as a multiple of a site’s existing use but only for agricultural to residential contexts, squarely at odds with government’s housing policy goal of “fixing the broken housing market … [and] planning the right homes in the right places“ as captured in exacting housing supply targets and delivery tests in high value, high demand inner city boroughs like Southwark.

Until these inconsistencies are resolved, the government will continue to preside over a broken housing economy with a reluctance to address the fundamental drivers of our housing crisis. 

Southwark isn’t hanging around waiting for these changes – we are already developing the practical tools that would support such a reformed land trading and viability testing system, including  a Viability Benchmarking Model  that would standardise the data sources that inform cost value and yield figures that viability consultants manipulate to plead their client’s case. Further to this, we are also developing a prototype towards a standardised Land Value Register that reports live existing use values for sites allocated for residential development: this could be used to create either a formal cap for surveyors and developers in the land trading system, or better still, provide a basis for local authorities to support more rational land assembly for the purposes of affordable housing, either from itself or another builder.

Today, Dulwich and West Norwood MP Helen Hayes will begin the process of airing these arguments in the House of Commons and rallying a cross-party consensus around a new Planning (Affordable Housing and Compensation) Bill. The housing crisis cannot be solved without this long overdue land reform for cities, and our uncertain times demand this bold kind of thinking.

Leo Pollak is a Labour councillor for South Bermondsey in the London Borough of Southwark.

 
 
 
 

In South Africa's cities, evictions are happening despite a national ban

An aerial view shows a destroyed house in Lawley, south of Johannesburg, on April 20, 2020. The city has been demolishing informal structures on vacant land despite a moratorium on evictions. (Marco Longari/AFP via Getty Images)

On the morning of 15 July, a South African High Court judge ruled that the city of Cape Town’s Anti-Land Invasion Unit had illegally evicted a man when it destroyed the shack where he was living.

That afternoon, the Anti-Land Invasion Unit was out again, removing shacks in another informal settlement.

Evictions were banned in South Africa for nine weeks, after the national government placed the country under a strict Covid-19 lockdown in late March. At present, eviction orders are automatically suspended until the country moves to a lower “alert level” and can only be carried out with a special order from a judge.

Yet major cities including Cape Town, Johannesburg and eThekwini (created through the merger of Durban with several surrounding communities), have continued to use municipal law enforcement agencies and private security companies to remove people from informal housing. In many cases those operations have been conducted without a court order – something required under regular South African law.

Around 900 people were evicted from three informal settlements in eThekwini during the eviction ban, according to the Church Land Programme, a local NGO. Its director, Graham Philpott, says it’s also aware of evictions in other informal settlements.

While evictions aren’t a “new experience” in these communities, the NGO released a report on lockdown evictions because they were “so explicitly illegal”. “There was a moratorium in place,” Philpott says, “and the local municipality acted quite flagrantly against it. There’s no confusion, there’s no doubt whatsoever, it is illegal. But it is part of a trend where the eThekwini municipality has acted illegally in evicting the poor from informal settlements.”

Evictions also took place in Cape Town and Johannesburg during so-called “hard lockdown” according to local activists. In eThekwini and other municipalities, the evictions have continued despite restrictions. In Cape Town, authorities pulled a naked man, Bulelani Qholani, from his shack. That incident, which was captured on video, drew condemnation from the national government and four members of the Anti-Land Invasion unit were suspended. 


The cities say they’re fighting “land invasions” – illegal occupations without permission from the land owner.

“Land invasions derail housing and service projects, lead to the pollution of waterways, severely prejudice deserving housing beneficiaries and cause property owners to lose their investments over night,” Cape Town’s executive mayor, Dan Plato said in a statement. (Plato has also claimed that Qholani did not live in the shack he was pulled from and that he disrobed when municipal authorities arrived.)

South African municipalities often claim that the shacks they destroy are unoccupied. 

If they were occupied, says Msawakhe Mayisela, a spokesman for the eThekwini municipality, the city would get a court order before conducting an eviction. “Everything we’re doing is within the ambit of the law,” Mayisela says. But “rogue elements” are taking advantage of Covid-19, he added.

“We fully understand that people are desperately in need of land, but the number of people that are flocking to the cities is too much, the city won’t be able to provide housing or accommodation for everyone overnight,” he says. 

While eThekwini claims to be a caring city, local activists say the evictions show otherwise.

In one case, 29 women were evicted from shacks during the hard lockdown. With nowhere to go, they slept in an open field and were arrested by the South African Police Service for violating the lockdown, Philpott says.

“These evictions are dehumanizing people whose dignity is already compromised in many ways,” says S’bu Zikode, the president of Abahlali baseMjondolo, a community organization whose Zulu name translates to “the people of the shacks”. 

“It has reminded us that we are the people that do not count in our society.”

Municipal law enforcement and private security contractors hired by cities regularly fire rubber bullets, or even live ammunition, at residents during evictions. Some 18 Abahlali baseMjondolo activists have been killed since the organization was founded in 2005, Zikode says, most by the eThekwini Land Invasion Unit and Metro Police.

(Mayisela says that if city employees have broken the law, Abahlali baseMjondolo can file a complaint with the police. “There is no conclusive evidence to the effect that our members have killed them,”  he says.)

Other Abahlali baseMjondolo activists have been killed by what Zikode calls “izinkabi,” hitmen hired by politicians. Two eThekwini city councillors were sentenced to life in prison 2016 after they organized the killing of Thuli Ndlovu, an Abahlali baseMjondolo organizer. A member of the Land Invasion Unit who is currently facing a charge of attempted murder after severely injuring a person during an eviction remains on the job, Zikode says.

South Africa’s 1996 constitution is intended to protect the public from arbitrary state violence and guarantees a right to housing, as well as due process in evictions. But for Zikode, the South African constitution is a “beautiful document on a shelf”.

“For the working class and the poor, it’s still difficult to have access to court. You’ve got to have money to get to court,” he says. 

The actions by municipal law enforcement are breaking down social trust, says Buhle Booi, a member of the Khayelitsha Community Action Network, a community group in the largest township in Cape Town.

“There’s a lack of police resources and those very few police resources that they have, they use to destroy people’s homes, to destroy people’s peace, rather than fighting crime, real criminal elements that we see in our society,” Booi says.

For him, it’s a continuation of the practices of the colonial and apartheid governments, pushing poor people, most of whom are Black, to the periphery of cities.

Around one-fifth of South Africa’s urban population live in shacks or informal dwellings, according to a 2018 report by SERI. Many more live in substandard housing. City governments maintain that the shacks destroyed during anti-land invasion operations are unfinished and unoccupied. But Edward Molopi, a research and advocacy officer at SERI, says that this claim is an attempt to escape their legal obligations to get a court order and to find alternative accommodation for affected people. 

The roots of the current eviction crisis go back to apartheid, which barred non-white people from living in cities. Between the 1940s and 1970s, tens of thousands of people were forcibly relocated from neighbourhoods like Johannesburg’s Sophiatown and Cape Town’s District Six to remote townships.

In the 26 years following the end of apartheid, deepening economic inequality and rampant unemployment have limited access to formal housing for millions of South Africans. Government housing programs have mostly focused on building small stand-alone homes, often on the peripheries of cities far from jobs and amenities.

While these well-intentioned projects have built millions of homes, they’ve failed to keep up with demand, says Marie Huchzermeyer, a professor at the Centre for Urbanism & Built Environment Studies at the University of the Witwatersrand in Johannesburg. Government-funded housing projects “will never on it’s own be enough,” she says. “It has to be accompanied by land release.”

Government policies call for the “upgrading” of informal settlements and the formalization of residents’ occupation. But “there are still very, very, very few projects” of that nature in South Africa, Huchzermeyer says. “Even if it’s an informal settlement that’s been around for 20 years, there still seems to be a political wish to punish people for having done that.” The government wants people to go through the formal process of being given a house, she says – and for them to be thankful to the government for providing it.

At the municipal level, change will require “real leadership around informal settlement upgrading and around ensuring that land is available for people to occupy,” she says. 

Despite the end of enforced racial segregation, spacial apartheid remains a factor in South Africa. There are few mixed-income neighbourhoods. Those who can afford to often live behind walls in sprawling low-density suburbs, while the poor live in overcrowded slums and apartment buildings.

The creation of the apartheid city “didn't happen by chance,” says Amira Osman, a professor of architecture at the Tshwane University of Technology. “It was a deliberate, structured approach to the design of the city. We need a deliberate, structured approach that will undo that.”

Since last fall, Johannesburg’s Inclusionary Housing Policy has required developments of 20 or more units to set aside 30% of those units for low-income housing.

The policy, which faced significant opposition from private developers, won’t lead to dramatic change, says Sarah Charlton, a professor at the Centre for Urbanism and Built Environment Studies, but it is “an important and significant step.”

Zikode isn’t optimistic that change will come for shack dwellers, however.

“People in the high positions of authority pretend that everything is normal,” he says. “They pretend that everyone is treated justly, they pretend that everyone has homes with running water, that everyone has a piece of land – and hide the truth and the lies of our democracy.”

Jacob Serebrin is a freelance journalist currently based in Johannesburg. Follow him on Twitter.